Why We Need a Win-Win View of Difference to Tackle Populism

Too many people are struggling economically despite seemingly positive numbers on the economy, notes this opinion piece by Wharton dean Geoffrey Garrett. The reason: The vast majority of the gains continue to go to those at the pinnacle of the income scale. That has led many people underneath to become more isolationist on economic and social issues. A better approach, he writes, would be to boost economic growth and “to make the economy work better for more people.”

The current wave of populism in the Western world is driving America and Europe in directions that are not only anti-establishment and anti-elite, not only anti-trade, anti-immigrant, and anti-global, but also anti-difference — in all its forms.

Since at least the 1960s, the broad trajectory in the West has been to embrace and promote ever more difference in society, politics, and the economy; to view difference as an opportunity to be leveraged, not a threat to be defended against. Difference has been the ultimate win-win: So long as we exchange and share ideas, efforts, and products, everyone will be better off. The more difference, the better.

Today, this win-win view of difference is increasingly under siege from a win-lose mentality. For me to win, you must lose. If you win, I lose. This mentality views difference as a threat, not an opportunity. And to “win” means pushing back against trade, immigration, multiculturalism, cosmopolitanism — all manifestations of difference.

The rhetoric of Donald Trump exemplifies this perspective. Making America great again is all about winning. And winning means beating others, not looking for win-wins. Trump has taken the kill or be killed, sharp-elbowed world of New York real estate — where there are real winners and losers — and turned it into a political worldview: The way for America to be great again is to win again, to protect Americans from losing to migrants, foreign companies and foreign governments, or to people at home who look, act, and see the world differently.

“The problem today is that many people are giving up on the notion of win-wins because they feel they are losing, that their lives are getting worse instead of better.”

But most of life isn’t like a tennis match in which only one player can win and the other must lose. In fact, I believe essentially everything that is good in life is about win-wins — searching for them, working to realize them, and benefiting from them. And win-wins are all about leveraging the power of difference.

The Rise of Populism

The problem today is that many people are giving up on the notion of win-wins because they feel they are losing, that their lives are getting worse instead of better. They feel they are losing at the expense of the big winners — not only Wall Street, the City of London, and tech whiz kids from Silicon Valley to Tel Aviv, but also undocumented migrants from Mexico, refugees from Syria, and factory workers in China.

Knowledge@Wharton High School

Below is a stunning graph from a new book by Bridgewater Associates’ Ray Dalio, A Template for Understanding Big Debt Crises, that makes exactly this point. Inequality, or more precisely a breathtaking separation of the people at the very top of the income distribution from everybody else, is an increasingly dominant reality of our times. And there is a clear correlation between the emergence of the super rich and the rise of populism. The high point of populism today coincides with an income distribution in which the total wealth of the top 0.1% of Americans is almost as big as the total wealth of the bottom 90%.

Inequality is a relative term. But it should not conceal that too many people are doing worse in absolute terms as well. McKinsey estimates that two-thirds of the population in the advanced economies experienced flat or falling incomes in the decade around the 2008 financial crisis.

No wonder so many people are angry – at government, at big business, at foreigners and foreign countries. I think this is at the center of the rise of populism. And it amounts to a frontal attack on the pro-difference consensus that has dominated the Western world for 50 years or more.

Here are two pieces of evidence of this frontal attack, concerning immigration and borders.

The first is from a 24-country Ipsos survey, showing that roughly twice as many people are opposed to immigration as support it. This is remarkable given the vital roles of migrants woven into the cultural and historical fabric of the success stories of America and so many other Western countries, now dating back hundreds of years.

The second piece of evidence concerns the hardening of borders, via a dramatic shot of the world from space using GIS technology in new work by my Penn colleague Beth Simmons. The map shows that despite all the talk about how technology and globalization have created an ever more “borderless” world, physical boundaries protecting and managing entry into the U.S. and in Western Europe of people and goods from often much poorer neighbors are a pervasive feature of the contemporary world.

For those of us who believe difference is the ultimate win-win, what should we do? It is clearly not enough to assert that trade, immigration, and globalism are good for society as a whole. Rather we need to recognize and then address the root issues driving today’s populism, nativism, and nationalism.

Reversing the Damage

To do so requires not only real empathy with people who feel they are losing but also real solutions to the problems so many people face. Here is a simple three-part action plan for reversing the damaging trajectory that threatens much of what the West has stood for, not only since the 1960s but in fact since the golden age of political liberalism in the 19th century.

First, we need to generate more economic growth. The 1990s was the decade when globalization and the internet really took off. But the push back against them was really quite muted. Why? One obvious reason is that economic growth was strong: 3.3% average growth in the U.S. GDP each year for the whole decade, 2.8% for all high-income countries.

Since 2000, average annual economic growth in the U.S. has been 1.8%; 1.7% for all high-income economies. Growth is not everything, but it really matters. I suspect all of today’s rancor and division would be muted were economic growth stronger

Second, we need growth to be more inclusive. Globalization and technology are key drivers of economic growth. But they have also been narrowing. Smaller and smaller portions of the population have contributed more and more to growth. We need to reverse that trend.

Third, that means finding better jobs for more people. No surprise for someone in higher education, I believe increasing skills in society to take advantage of globalization and technology, rather than trying to protect against them, is the right way to go.

And here a lot of the news is not nearly as dire as is often portrayed. Rather than a shortage of good jobs, we live in a world where not enough people have the skills needed to do the jobs of today. Techhire, for example, estimates there are more than half a million unfilled jobs in tech in America today.

Karl Marx famously believed that our labor alienated us from who we are. For many today, what we do defines who we are. A lot of the disquiet in our world comes from deep dissatisfaction in the way the economy is affecting lives. If we can make the economy work better for more people, I believe we can get back to the place where we recognize difference is a source of strength in our society, not a threat to our well-being. And a place where we focus on win-wins instead of worrying about losing out to others.

APA

Why We Need a Win-Win View of Difference to Tackle Populism.
Knowledge@Wharton
(2018, October 04).
Retrieved from https://knowledge.wharton.upenn.edu/article/need-win-win-view-difference-tackle-populism/

Chicago

"Why We Need a Win-Win View of Difference to Tackle Populism"
Knowledge@Wharton, October 04, 2018,
accessed May 25, 2019.
https://knowledge.wharton.upenn.edu/article/need-win-win-view-difference-tackle-populism/

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2 Comments So Far

Mark Pitts

First, let me thank the author for a thoughtful, rather than combative, approach to bridging the gap between the two camps in the American political scene.

I agree with much of what Mr. Garrett says. However, I would like to point out what appears to be misunderstandings in his analysis of the problems.

First, on the immigration issue, I think Mr. Garrett misses the point almost entirely. Conservatives generally are not against immigration – after all, as liberals are fond of saying, “We are a nation of immigrants.” However, we are not a nation of illegal immigrants, and that is the issue of the day. As conservatives are fond of saying, “Laws Matter.”

The hardening of borders that Mr. Garrett refers to is of course not a consequence of legal immigration. It is solely a consequence of illegal immigration.

Secondly, Mr. Garrett likely misleads readers in his discussion of incomes. Yes, incomes narrowly defined have been essentially unchanged for some time, but total compensation has risen. Specifically, employer-paid health insurance costs have risen dramatically over the periods in question. If not for this “transfer” of salary increases to increased health care premiums, the salary picture would be quite different.

Thirdly, Mr. Garrett surely misleads his readers in the discussion of the distribution of wealth. Although he does not cite his source, his presented results suggest he is relying upon a popular, and very inaccurate, measure of wealth distribution. Specifically, the method in question focuses almost solely on financial assets (stocks and bonds) and ignores pension benefits (company sponsored as well as government sponsored) and, in many cases, home equity. Since pension contributions and home equity are the primary investment vehicles for the middle class, if one ignores such investments, any analysis will show (quite inaccurately) that only the rich have moved forward.

I appreciate the opportunity to join in the discussion and look forward to any comments by the author or other readers.

David Parnell

It was telling to watch which entities and “camps” attacked Thomas Piketty, and those “ratings agencies” which literally participated in the collapse of 2007-2008 with their fraud and which now assume they have the capacity to rate NATIONS. Now I see why our founding fathers so feared the French Revolution, the French attacked the ruling elites. Our primarily slave owning, slave transporting, land seizing founding fathers were afraid of US…not the British King. Subsequently they met in secrecy (so few empowered to control so many) to overthrow the Articles of Confederation which just years before they vowed never do. George Washington, “His Excellency,” almost wet his pants when the notes of the prior meetings were found dropped on the ground by an unidentified attendee. They feared deeply that “we” would find out about the plot to take control under a new “Constitution” which greatly consolidated power and control into “their” hands. Even then they set “us” upon the path to where we are today. Even then though they profoundly and profusely used the words equality and freedom together, they secretly snickered at the very concept of equality for they were elitist each and everyone. Even now modern historians so frequently cite the Federalist Papers when discussing the Constitution and so infrequently mention the observations and objections of the Anti-Federalist Papers. Our founding fathers enriched themselves by claiming land belonging to the Indians and then having men like George Washington survey and subdivide said lands which were sold to and occupied by innocent civilians. Subsequently when the Indians killed the new “occupants” to reclaim their land, the parcels returned to the ownership of our founding fathers who then again resold the land to unsuspecting, adventurous settlers only to have the cycle of violence repeat itself. So, here we are today with another “imperial president,” still focused on deceiving “us” and a Congress still seeking to “control” us as opposed to “serving” us. Again I am reminded of the writings of Howard Zinn, especially “The Politics of History,” and of C. Wright Mills and, “The Power Elite,” and let’s not forget Charles Beard’s “An Economic Interpretation of the U.S. Constitution,” published over a hundred years ago. The very term, populism, is again being asserted as some naive, rebellious tendency of the poor which reemerges randomly only to be beaten down again by the “true patriots”, the “entitled,” “educated,” few who only are capable of seeing and expressing the destiny of our nation. In fact, we are exactly where our “Founding Fathers” wanted us to be, subject to a wealthy few by even denying us the term democracy but instead insisting we are a republic which they alone are destined to rule.